[Federal Register: April 17, 1997 (Volume 62, Number 74)]
[Rules and Regulations]
[Page 18705-18710]
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LIBRARY OF CONGRESS
Copyright Office
37 CFR Part 201
[Docket No. RM 86-7B]
Cable Compulsory Licenses: Definition of Cable Systems
AGENCY: Copyright Office, Library of Congress.
ACTION: Final rule.
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SUMMARY: The Copyright Office of the Library of Congress is adopting
final regulations recognizing that satellite master antenna television
(SMATV) systems are eligible as cable systems under section 111 of the
Copyright Act to obtain a compulsory license to retransmit broadcast
signals to their subscribers. The regulations provide guidance as to
who should file and how to report distant signals.
EFFECTIVE DATE: July 1, 1997.
FOR FURTHER INFORMATION CONTACT: Nanette Petruzzelli, Acting General
Counsel, or Tanya Sandros, Attorney Advisor, Copyright Office, Library
of Congress, Washington, D.C. 20540, (202-707-8380) or Telefax (202-
707-8366).
SUPPLEMENTARY INFORMATION:
Background
Section 111 of the Copyright Act, 17 U.S.C., establishes a
mechanism by which cable systems may obtain a compulsory license to
make secondary transmissions to their subscribers of copyrighted works
performed on broadcast stations. A compulsory license is attractive to
users of copyrighted material because it gives them guaranteed access
to and a guaranteed price for copyrighted works, and avoids the costs
of negotiating with each individual copyright owner. As a result, many
providers of broadcast signals have sought to qualify as cable systems
under section 111, so that they may obtain a cable compulsory license.
Consequently, on October 15, 1986, the Copyright Office published a
Notice of Inquiry inviting public comment on whether satellite master
antenna television systems (SMATV), multichannel multipoint
distribution
[[Page 18706]]
systems (MMDS),<SUP>1 or satellite carriers\1\ qualify as cable systems
under section 111 of the Copyright Act. 51 FR 36705 (Oct. 15, 1986). As
part of the inquiry, the Office solicited specific comments on how an
individual SMATV operation qualifying as a cable system would file
statements of account, and on who would be deemed the owner of a SMATV
system. The inquiry concerning SMATV systems was based on the following
understanding of how a SMATV operates:
\1\ On January 29, 1992, the Office concluded its inquiry into
the definition of a ``cable system'' in Docket No. 86-7B and issued
a regulation denying both ``wireless'' cable operators and satellite
carriers eligibility for the cable compulsory license. 57 FR 3284
(January 29, 1992). Subsequent to the issuance of this regulation,
Congress passed the Satellite Home Viewer Act of 1994, Public Law
103-369, which amended the definition of a ``cable system'' in
section 111 to include ``wireless'' cable systems, such as the
multichannel multipoint distribution systems.
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SMATV systems use TVROs [television receive-only satellite dish]
to receive transmissions via satellite, and a master antenna for
receipt of over the air television signals. The programming is then
combined and distributed by cable to subscribers, primarily in
apartment houses and other multi-unit residential buildings.
51 FR 36706 (1986).
After analysis of the comments to the Notice of Inquiry, the
Copyright Office concluded that SMATV systems could qualify as cable
systems and issued a Notice of Proposed Rulemaking proposing
regulations by which SMATV systems could obtain a compulsory license to
retransmit broadcast signals. 56 FR 31580 (July 11, 1991). At that
time, the Office also acknowledged its practice of accepting filings
from SMATV operators, without ruling on their sufficiency or adequacy,
during the period that the Office considers whether such filings are
appropriate. 56 FR 31596 (1991). The Office further advised those SMATV
operators, who had previously filed Statements of Account during prior
accounting periods without guidance or knowledge of the new rules, that
they need not amend these filings. This understanding, however, does
not preclude any facility from amending its prior filings under the new
regulations, after they are issued in final form.
Comments
Responding to the proposed regulations on the eligibility of SMATV
systems for the cable compulsory license, the Office received direct
comments from:
--Liberty Cable Company, Inc. (Liberty), a SMATV system operator in the
New York City area.
--MaxTel Cablevision, a SMATV system owner and operator, Western Cable
Communications, Inc., a SMATV system owner and operator, and National
Private Cable Association, an association of SMATV systems operators,
equipment manufacturers, vendors, and program distributors, jointly
(MaxTel et. al.);
--Mid-Atlantic Cable, Stellar Communications, Inc., TeleCom Satellite
Systems Corp., Telesat Cablevision, Inc., 21st Century Technology
Group, Inc., all SMATV system operators, and National Satellite
Programming Network, Inc., a provider of programming and support
services to SMATV systems operators, jointly (Mid-Atlantic et. al.);
--the Motion Picture Association of America, Inc. (MPAA), a trade
association that represents copyright owner-claimants for section 111
royalties;
--the National Cable Television Association (NCTA), a cable television
trade association;
--National CableSystems Associates, (NCSA) owner and operator of 25
SMATV systems in the Atlanta, Georgia area;
--Pepper Corazzini, a law firm representing independently owned and
cable-affiliated SMATV systems;
--Satellite Television of New York Associates, d/b/a Community Home
Entertainment, (Community), the SMATV operator of Co-Op City, Bronx,
New York;
--Spectradyne, Inc. (Spectradyne), provider of free-to-guest satellite
video programming to hotels; and
--Turner Broadcasting System, Inc. (TBS), licensee of superstation
WTBS, Atlanta, Georgia.
The Office also received reply comments from:
--MaxTel, et. al.;
--MPAA;
--Major League Baseball, the National Basketball Association, and the
National Hockey League (the Professional Sports Leagues); and
--NCTA.
Eligibility for the Section 111 Compulsory License
The following commentators agree with the Copyright Office's
conclusion that SMATV systems qualify as cable systems for section 111
purposes: Community, Liberty, Maxtel et. al., Mid-Atlantic et. al.,
MPAA, NCSA, Pepper Corazzini, Spectradyne, and TBS.
NCTA takes no position on the question of SMATV eligibility.
The Professional Sports Leagues oppose the eligibility of SMATV
systems as cable systems because they argue that Congress intended to
draw a distinction between traditional cable and other retransmission
media, such as MATV systems (the predecessor systems to SMATVs, similar
in all respects to SMATV systems except without the capacity to receive
satellite transmissions) when they exempted MATV systems from copyright
liability in section 111, so long as they retransmitted only local
signals to their subscribers. Professional Sports Leagues, reply
comments at 7-8. Thus, having afforded MATV systems such an exemption,
the Professional Sports Leagues argue that the remainder of section 111
is intended to apply to traditional cable systems. The Professional
Sports Leagues also argue that the section 111 compulsory license was
based on economic necessity, and that in 1976, traditional cable
systems could not exist without the compulsory license, but such
economic necessity was not true of MATV systems then, or SMATV systems
now. Reply comments at 8.
This argument was raised in the previous round of comments and
responded to by the Office in the 1991 Notice of Proposed Rulemaking
where the Office said that the section 111(a)(1) exemption was intended
merely to ensure that residents of multiple unit dwellings had access
to local television signals. 56 FR 31595 (July 11, 1991). The section
111(a)(1) exemption does not prohibit a master antenna television
system from importing distant signals nor does it address the
consequences of importing distant signals. The Office considered that
such a system would have copyright liability. Whether it must meet that
liability through negotiation with the copyright owners or could meet
it by obtaining a compulsory license is the issue, and the fact that
Congress gave MATV systems an exemption for local retransmissions does
not affect the analysis.
Nor does the Office agree that the analysis should depend on
whether SMATV systems would still be economically viable without the
compulsory license. As the Professional Sports Leagues themselves point
out, many cable systems today would be economically viable without the
compulsory license, but nothing in section 111 would render a cable
system ineligible because it was economically sound. The viability of a
provider of broadcast signals with or without the compulsory license is
not the question; the question is whether Congress intended the
providers to be included in section 111.
TBS agrees that SMATV systems qualify as cable systems, but
disagrees
[[Page 18707]]
with certain aspects of the Copyright Office's analysis. It argues that
the Office should not look to whether a particular video provider
constitutes a ``local medium of limited availability,'' or to whether
the FCC has affirmatively approved retransmissions by a particular type
of facility, but should confine itself to addressing whether a SMATV
system ``retransmits broadcast signals to paying subscribers by wires,
cables, or other communications channels.'' TBS, comments at 13-14. In
other words, TBS argues that the Copyright Office should only look at
the section 111 definition of a cable system. However, as the Office
has stated previously, section 111 must be construed in accordance with
Congressional intent and as a whole, not just in reference to one
particular section. 57 FR 3292 (Jan. 29, 1992). The Office notes that
at the time Congress created the cable compulsory license, the FCC
regulated the cable industry as a highly localized medium of limited
availability, suggesting that Congress, cognizant of the FCC's
regulations and the market realities, fashioned a compulsory license
with a local rather than a national scope. This being so, the Office
retains the position that a provider of broadcast signals be an
inherently localized transmission media of limited availability to
qualify as a cable system. 56 FR 31595 (July 11, 1991).
It is therefore the Office's conclusion, after considering the
above comments, that SMATV systems are cable systems for purposes of
section 111.
Identifying a SMATV System
While the Copyright Office has discussed the eligibility of SMATV
systems for the cable compulsory license and described how a SMATV
system operates in its initial Notice of Inquiry, the Office has chosen
not to define a SMATV system in its regulations, although SMATV systems
present unique compulsory license reporting issues which require
clarification in the Copyright Office's rules. None of the commentators
raised the issue, suggesting that the nature and operation of a SMATV
system is generally understood within the industry. We note, too, that
the Federal Communications Commission, while regulating SMATV systems
in various ways, has never defined a SMATV system in its regulations.
Yet, all parties must operate with a common understanding as to what is
a SMATV system. To this end, the Office believes an examination of the
FCC regulatory policy toward SMATV systems is useful for determining
the characteristics of a SMATV system.
Since 1966, the FCC's definition of a cable system excluded those
systems serving multiple unit dwellings. See, Second Report and Order
on CATV Regulation, 2 FCC 2d 725 (1966). These excluded systems were
apparently originally MATVs (Master Antenna Television Systems), but
were later thought to include SMATVs. In the 1984 Cable Act, Congress
specifically excluded from the definition of a ``cable system'' ``a
facility that serves only subscribers in 1 or more multiple unit
dwellings under common ownership, control, or management, unless such
facility or facilities uses any public right-of-way * * *.'' 47 U.S.C.
522(7) (1984). The House Report to the Cable Act described the
exemption as applying to ``a facility or combination of facilities that
serves only subscribers in one or more multiple unit dwellings (in
other words, a satellite master antenna television system), unless such
facility or facilities use a public right-of-way.'' H.R. Rep. No. 934,
98th Cong., 2d Sess. 44 (1984).
Congress modified the section 522(7) exemption in the
Telecommunications Act of 1996. The section now exempts from the
definition of a cable system ``a facility that serves subscribers
without using any public right-of-way.'' 47 U.S.C. 522(7) (1996). The
new exemption certainly continues to include SMATV systems, but has
been broadened to include other types of retransmission facilities such
as wireless cable.
While the Office believes that the history of communications
regulation of SMATV systems is relevant to determining what is a SMATV
system, we acknowledge that it is not dispositive for the copyright
inquiry. We do not believe that the FCC requirement of not crossing a
public right-of-way is important for section 111 purposes because the
distinction only determines whether such a facility will be regulated
as a cable system for FCC purposes, as opposed to defining what a SMATV
system is or does. Consequently, we are identifying as SMATV systems
only those facilities which receive television signals from satellites
and retransmit them to subscribers residing in multiple unit dwellings,
such as apartment complexes and hotels.
Party Responsible for Filing the Statement of Account and Remitting
Royalties
In the Notice of Proposed Rulemaking, the Office proposed that the
party responsible for filing the statement of account and remitting
royalties on behalf of a SMATV system should be the building owner
where the SMATV system is operating, not the entity that provides the
signals and maintains the facility.
This was proposed for two reasons. First, it was observed that
satellite carriers are often the signal providers for a building, and
to allow a satellite carrier to designate itself as the own
er of the
cable system could qualify a satellite carrier as a cable system, a
result contrary to the Office's conclusion that satellite carriers are
not cable systems.
Second, designating the distributors of the broadcast signals as
the filer might result in lower reported gross receipts, because the
distributor would report the rate it charged the building, but not any
add-ons, if there were any, that the building owner might charge the
residents or guests.
1. Concerns About Requiring Building Owners To File
The Office's question about who should be the filer elicited the
greatest amount of discussion from the commentators. Uniformly, the
comments state that the filer should not necessarily be the building
owner. The commentators' greatest concern is that if the responsibility
to file is placed on the building owner, many building owners will be
inclined to avoid the responsibility by either replacing the SMATV
system with a traditional cable system or ceasing to provide video
programming altogether. These concerns were addressed in the comments.
See Spectradyne, comments at 3-4; NCSA, comments at 6-7; Mid-Atlantic
et. al., comments at 4; and Community, comments at 3-4.
2. Comments Addressing Copyright Office's Concerns
Many of the commentators who believe the system operator, not the
building owner, should be the filer, sought to allay the Office's
concerns about satellite carrier eligibility and the potential for
underreporting gross receipts.
As to whether satellite carriers that distribute signals to SMATV
systems would qualify as cable systems, Pepper and Corazzini assert,
The satellite carrier would never be in a position to designate
itself as the cable system. Where the owner of a hotel or multi-unit
dwelling provides the service itself, it purchases the signals from
the satellite carrier or the carrier's distributor. The satellite
carrier does not exercise any control or management responsibility
over the SMATV system, nor does the carrier have
[[Page 18708]]
any contractual privity with the subscribers. This is true whether
the SMATV service is provided by the hotel or an owner of a multi-
unit dwelling or by an [sic] SMATV operator.
Pepper Corazzini, comments at 5.
Similarly, Maxtel et. al. states,
It is not the satellite carrier who is the signal distributor to
the customers of the SMATV operator any more than that satellite
carrier is the signal distributor to the customers of the
traditional franchised cable television operator. The satellite
carrier merely distributes signals to the headend facility of either
the SMATV operator or the cable franchisee * * * Contrary to the
direct transmission between a satellite carrier and an individual
single family home TVRO [television receive-only satellite dish],
there is always an intermediary retransmitter between the satellite
carrier and the subscriber residing within an apartment complex, for
example. Thus, the satellite carrier would never be designated as
the owner of the cable system for filing purposes and the Copyright
Office need not be concerned over any anomaly with its determination
that ``satellite carriers do not and cannot qualify for the cable
compulsory license.''
MaxTel et. al., comments at 5.
Spectradyne addresses the possibility, disputed by Pepper
Corazzini and MaxTel et. al., that a satellite carrier could both
deliver the distant signal and be the SMATV system operator. It argues
that the Copyright Office's concerns can be met in the case of a
satellite carrier which happens also to be a SMATV operator, because
``the [compulsory] license would apply only to the SMATV element of the
satellite carrier's business. In order to be free from copyright
infringement liability for the remaining portions of its operation
(ground to transponder to ground) the satellite carrier would either
have to qualify as a passive carrier or negotiate copyright licenses.
There is no anomaly in this.'' Spectradyne, comments at 5.
The commentators also believe that the potential for underreporting
the gross receipts can be avoided.
Spectradyne states that ``any fear of revenue under-reporting can
be relieved by imposing on system operators the obligation to report
not only amounts received by them but the higher of the amounts they
receive and any amounts collected by the hotel operator from guests for
the privilege of viewing the tier of service at issue.'' Spectradyne,
comments at 6-7.
MaxTel et. al. posits three possible situations concerning bulk
rates that may or may not reflect the total gross receipts.
First, most SMATV operators contracting with private property
owners do not provide such service on a bulk rate basis, but rather
charge individual subscribers directly for the service. Second, most
property owners desiring a bulk rate contract do so to increase
occupancy, and thus do not even charge a premium for the cable
service. Third, traditional franchised cable television operators
also enter into bulk rate contracts with private property owners, in
which the owner can charge the residents a higher fee than the
property owner paid the cable franchisee for the service. Yet the
Copyright Office has not found the cable system owner in that
circumstance to be the property owner as opposed to the cable
franchisee * * * If the Copyright Office wishes to rectify the fact
that the gross receipts figure will necessarily not include any
additional charges rendered by a property owner authorizing service
under a bulk rate contract, then the Copyright Office should adopt
regulations applicable to both SMATV operators and cable
franchisees.
MaxTel et. al., comments at 7.
Mid-Atlantic et. al. argues that the definition of the SMATV system
operator can be made flexible enough so that if there is no additional
charge by the building owner, the business operating the SMATV system
is the SMATV system operator, but if there is an additional charge by
the building owner, as reflected in subscription agreements with the
individual subscribers in the building, then the building owner would
be the one designated in that instance as the SMATV system operator.
Mid-Atlantic et. al., comments at 5.
3. Commentators' Recommended Definition of Filer
Community recommends that the filer be ``the entity that provides
the service to the actual subscriber or to the tenant or unit owner.''
Community, comments at 4.
Liberty recommends a definition of the filer that would allow
either the building owner or the SMATV system operator to make the
filings and the payments, according to whichever arrangement made sense
to the SMATV system operator and building operator, provided that the
building operator could designate an agent to sign the Statement of
Account. Liberty, comments at 1-2. Similarly, Spectradyne recommends
``permitting either the building owner or the system operator to file
the statement of account.'' Spectradyne, comments at 4.
Mid-Atlantic et. al. recommends that the filer should be the
operator of the SMATV system, whether that is the building owner or a
third party who has a contract with the building owner to provide the
service. Mid-Atlantic et. al., comments at 2.
MaxTel et. al. recommends that the filer should be ``the owner of
the headend facility and the recipient of the subscriber revenues.''
MaxTel et. al., comments at 9. MPAA supported this recommendation.
MPAA, reply comments at 16. Similarly, NCSA recommends defining the
filer as ``that party who both provides the cable TV service to the
ultimate subscriber or television viewer and also receives payment from
said subscriber or television viewer for the service either directly or
indirectly through a third party.'' NCSA, comments at 11. Likewise,
Pepper Corazzini recommends that the filer be ``the entity that is in
charge of the operation of the system and the collection of subscriber
revenues.'' Pepper and Corazzini, comments at 8.
4. Discussion
The Office appreciates the concern expressed by SMATV system
operators that if the building owner is required to be the filer, some
building owners might refuse to take on that responsibility, to the
detriment of the SMATV system operator. Therefore, the Office agrees
that the building owner who is uninvolved with the SMATV system
operation may not, in that circumstance, be the best one to file the
statement of account.
In searching for the best solution, the Office is inclined to agree
with NCSA, that the filer should be the party that provides the
retransmission service and receives the payment, either through a bulk
rate charged to the building owner, or by individually billing the
subscriber, or by any other billing arrangement.
The Office also appreciates the distinction drawn by Spectradyne
between a satellite carrier acting in its capacity as a SMATV system
operator and a satellite carrier acting in its capacity as the
deliverer of the distant signal. The Office agrees that the satellite
carrier could also be the SMATV system operator for that portion of the
satellite carrier's operation for which it performs the functions of a
SMATV system operator, but not for the direct delivery of the distant
signals.
Similarly, a building owner could also be a SMATV system operator,
if the building owner is the one that provides the retransmission
service and collects the payments from the subscribers.
Furthermore, the Office acknowledges the points raised by MaxTel et
al. about bulk rates and the importance of ensuring that any rules
adopted for SMATV system are consistent with the Office's policy toward
traditional cable systems. Therefore, the gross receipts that shall be
reported shall be those collected by the filer, either directly from
the subscribers or indirectly through a third party.
[[Page 18709]]
In no case shall gross receipts for the SMATV facility be less than
the cost of obtaining the signals of primary broadcast transmitters for
subsequent retransmission by the SMATV facility. As a result, if the
building owner is the SMATV system operator because he or she provides
the retransmission service, but does not charge his or her residents,
tenants, or guests, because it is a ``free'' service, the building
owner, nonetheless, reports as gross receipts the amount that he or she
pays the satellite carrier for the cost of bringing in the broadcast
signals.
Calculation of Royalties for Form 3 SMATV Systems
In the Notice of Proposed Rulemaking, the Office stated that SMATV
systems that file as Form 3 systems--those grossing $292,000 or more
per semiannual accounting period--would be required to comply with the
signal carriage and market quota regulations applied by the FCC to
cable systems when making their royalty calculations, even though SMATV
systems that did not use the public rights-of-way were not, in fact,
subject to such regulations.
This proposal is supported by MPAA and NCTA, who each argued that
if SMATV systems are to qualify as cable systems, they should be
treated the same way as traditional cable systems. MPAA, reply comments
at 16-17; NCTA, comments at 2.
This proposal is opposed by Community. Community argues that the
Copyright Office is bound to follow the law, and that, under FCC rules,
SMATV systems not using the public rights-of-way were not subject to
distant signal quotas. Therefore, the Copyright Office may not impose
3.75% rate charges for signals that SMATV systems were permitted to
import before 1981. Furthermore, Community states that it received an
opinion letter from the General Counsel of the Copyright Office in 1984
confirming Community's interpretation of the law. Community, comments
at 2-3, Attachment C.
In reply, NCTA argues that the Copyright Office is not so
restrained as Community asserts, and that the Office may make common
sense responses to problems that arise during the implementation of
section 111, so long as those responses are not inconsistent with
congressional intent. NCTA believes it is logical for the Office to
conclude that since Congress intended new technologies to be eligible
for the cable license, it did not intend to treat these new
technologies more favorably than traditional cable systems. Finally,
NCTA notes that the Copyright Office requires newly constructed cable
systems to pay 3.75% rate royalties even though they were never subject
to the FCC's distant signal rules. NCTA, reply comments at 1-3.
The Office's main goal in administering section 111 is to implement
Congress' intent. Congress recently addressed the issue of how to apply
the definition of a cable system to new technologies when it amended
section 111(f) to include multichannel multipoint distribution service
systems, otherwise known as MMDS or ``wireless cable,'' as cable
systems. Satellite Home Viewer Act of 1994, Public Law 103-369, 108
Stat. 3477. Congressional intent is manifest in both the Senate and
House reports. The Senate report stated:
The committee intends ``wireless'' cable and traditional wired
cable systems to be placed on equal footing with respect to their
royalty obligations under the cable compulsory license, so that one
not have an unfair advantage over the other due to differences in
their regulatory status under FCC rules. The committee expects the
Copyright Office, in applying section 111 to ``wireless'' cable
systems, should treat ``wireless'' cable systems as if they were
subject to the same FCC rules and regulations that are applicable to
wired cable systems.
Sen. Rep. 407, 103d Cong., 2nd Sess., at 14 (1994).
Similarly, the House Report stated,
Because the purpose of this legislation is to place wired and
wireless cable systems on a level playing field, in calculating the
fees payable by wireless systems, reference should be made to the
same FCC rules that would be applicable if the system were wired,
e.g., the distant signal quota rules for purposes of determining
whether the 3.75% of gross receipts rate is applicable.
H. R. Rep. 703, 103d Cong., 2nd Sess., at 19 (1994).
Any reliance that Community believes should be placed on the 1984
opinion letter from the Office's General Counsel is now clearly
superseded by this expression of Congress' intent. Therefore, the
Office will require Form 3 SMATV systems to calculate their distant
signal royalties on the same basis as traditional cable systems.
Commonly Owned or Controlled SMATV Systems in Contiguous Communities
and SMATV Systems Operating From the Same Headend
Section 111(f) states that for purposes of determining the royalty
fee, two or more cable systems in contiguous communities under common
ownership or control, or operating from one headend, shall be
considered as one system.
In the Notice of Proposed Rulemaking, the Office stated that it had
received a request from NCTA to address its petition to reinterpret
section 111(f) to provide that two or more cable systems would have to
be in contiguous communities under common ownership and control and
operating from one head
end before they would be required to file as one
individual cable system. The Office responded to NCTA's petition by
stating that the issue was being addressed in another rulemaking
proceeding and would not be examined here. 56 FR 31596 (July 11, 1991).
However, several commentators submitted comments on a related issue
asking what constitutes ``contiguous communities'' in the context of
SMATV systems.
Pepper Corazzini argues that because most SMATV systems do not
use the public rights-of-way, by their very nature, they are stand
alone operations and are not contiguous with each other, even when they
are in the same community. Pepper Corazzini believe they should be
considered contiguous only when they are physically on adjoining
properties or are interconnected by wire or radio. Pepper Corazzini,
comments at 7. These comments are supported by MaxTel et al. MaxTel,
reply comments at 3-4.
MPAA and NCTA disagree with Pepper Corazzini and MaxTel et al.
They both argue that SMATV systems should be treated the same way as
cable systems and that the same interpretation of contiguous
communities should apply. NCTA proposes that the Office should require
commonly owned or controlled SMATV systems to be considered a single
cable system when they are located in the same or contiguous
communities, or when they operate from the same headend. NCTA, comments
at 2-3. MPAA supports NCTA's proposal. MPAA, reply comments at 16.
The Copyright Office agrees with MPAA and NCTA that Congress'
intent is to treat new technologies on the same basis as traditional
cable systems. It would be inequitable if a SMATV system operator,
serving several buildings within a community, were considered to be
operating separate cable systems, while a cable operator in that same
community serving several non-adjoining households is considered a
single system.
Therefore, the Office concludes that a SMATV system operator is a
single cable system when it serves multiple unit dwellings in the same
community or in contiguous communities, using political boundaries to
determine when communities are contiguous.
[[Page 18710]]
Accordingly, the Copyright Office and the Library of Congress
adopts the following rules.
List of Subjects in 37 CFR Part 201
Cable compulsory license, Cable systems, Satellite master antenna
television systems.
Final Regulations
In consideration of the foregoing, part 201 of 37 CFR, chapter II,
is amended in the manner set forth below.
PART 201--GENERAL PROVISIONS
1. The authority citation for part 201 is revised to read as
follows:
Authority: 17 U.S.C. 702.
Sec. 201.17 [Amended]
2. Section 201.17(b)(1) is amended by adding ``In no case shall
gross receipts be less than the cost of obtaining the signals of
primary broadcast transmitters for subsequent retransmission.'' after
the first sentence.
3. Section 201.17(b)(2) introductory text is amended by adding
``The owner of each individual cable system on the last day of the
accounting period covered by a Statement of Account is responsible for
depositing the Statement of Account and remitting the copyright royalty
fees.'' after the third sentence.
4. Section 201.17(e)(2)(i) is amended by adding ``The ``owner'' of
the cable system is the individual or entity that provides the
retransmission service and collects payment from the end user either
directly or indirectly through a third party.'' after the first
sentence.
Dated: April 3, 1997.
Marybeth Peters,
Register of Copyrights.
Approved By:
James H. Billington,
The Librarian of Congress.
[FR Doc. 97-9919 Filed 4-16-97; 8:45 am]
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